Santander is creating the potential for providing loans backed by tokens which might be collateralized in agricultural merchandise. The financial institution has partnered with Agrotoken, an organization that launched a sequence of agricultural commodity tokens already being utilized in agriculture-related markets to make transactions. A pilot take a look at has been performed to validate the system used to provide these loans.
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Santander Runs Grain-Backed Loans Pilot Take a look at in Argentina
The Spanish multinational financial institution Santander has introduced it’s creating a system to supply loans that will be backed by commodity tokens. The initiative has been launched in partnership with Agrotoken, an Argentinian startup that developed a bunch of grain-backed tokens permitting producers to transact with their commodities.
In keeping with a press launch by Santander Argentina, a take a look at run of the system has already been performed, and Argentinian producers validated the software program product and its state. Santander studies that is the primary product of its form, linking monetary merchandise with agricultural tokens, together with blockchain providers to facilitate transactions.
Fernando Bautista, head of agrobusiness at Santander Argentina, acknowledged:
That is the primary time {that a} service platform makes use of blockchain know-how and crypto belongings to develop the agricultural credit score market and launch the enterprise potential of the producer.
The tokens created by Agrotoken are three: SOYA, CORA, and WHEA. Every one in all these tokens is backed by a ton of grain (corn, soy, or wheat) that the producer delivered to a grain collector. The token is then issued by a decentralized system that makes use of “Proof of Grain Reserve” to validate the existence of the grain for every transaction.
Utilized Tokenization
Santander believes this token system will facilitate the creation of an entire new enterprise, the place agricultural producers will be capable to get financing in a simple approach, utilizing their very own merchandise as collateral. Fintech is among the hottest fields for Santander in Argentina, and the financial institution introduced it should make investments $225 million within the nation to modernize its software program and {hardware} infrastructure to supply new merchandise to its clients. That is based on Ana Botin, president of Santander.
The Agrotoken belongings have been utilized in a number of operations since 2021, serving to producers to amass equipment and different supplies in a simplified vogue. Santander’s curiosity in crypto just isn’t new, because the financial institution is already ready to supply a cryptocurrency ETF product in Spain.
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